One key difference between salaried and hourly workers under federal law is that hourly workers generally must be paid for all hours worked, including overtime, while salaried employees typically are entitled to no additional compensation for extra work, according to Investopedia. Hourly workers must be paid a minimum hourly wage set by federal and state law, whereas salaried workers must receive a set weekly wage in order to be deemed a salaried employee under federal law, notes the Houston Chronicle.
Most jobs in the United States are governed by the Fair Labor Standards Act, which classifies positions as exempt or non-exempt, explains Investopedia. Salaried workers are typically exempt workers under the FLSA and not entitled to overtime depending upon the nature of the position. While hourly workers, as non-exempt employees, may make more money over a given time period, salaried workers generally have more job security.
All employees, whether hourly or salaried, are entitled to health insurance benefits pursuant to the Affordable Care Act if they work a full-time position of 30 or more hours a week, according to Investopedia. However, the requirement has caused many employers to slash the hours worked by its hourly employees in order to circumvent the requirement to pay benefits.